Why is my blended tax rate 9.1%?" That is less than the 10% minimum? It is less than the tax table computes.

Forum|Forum|1 year ago
February 17, 2025
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Best answer by Greggy1

Turbotax calculates the blended tax rate by dividing total tax by your Adjusted Gross Income (AGI) on Line 11.

This AGI is before deductions including the standard deduction of $14,600 (or $29,200 for married couples).

The blended tax rate considers that the effective tax rate is 0 percent for the first $14,600 of income. Therefore, the blended tax rate can be lower than the minimum tax rate published of 10 percent.

MindyB

The blended tax rate is calculated by dividing tax by income. Income is based on adjusted gross income (AGI) from Form 1040, line 11, but it may include additional amounts if there any. ‌Tax starts with the amount on line 18 of Form 1040, including alternative minimum tax, but excludes some additional taxes like recapture tax. Certain nonrefundable credits, such as the Child Tax Credit, Fuel Tax Credit, and refundable portions of other credits, are subtracted from the tax amount. If you have any of these credits, this is likely why your blended rate is lower than you would expect. If refundable credits are larger than the tax, the effective tax rate can even be negative.

Greggy1Answer

Turbotax calculates the blended tax rate by dividing total tax by your Adjusted Gross Income (AGI) on Line 11.

This AGI is before deductions including the standard deduction of $14,600 (or $29,200 for married couples).

bgbrintonAuthor

The blended tax rate is based on the taxable income, not AGI. I confirmed which numbers matched. My tax is 6.2%of AGI. The tax table says my tax should be 8543, but TT is saying 6715. How can I confirm the TT calculation of my tax?

CatinaT1

The Blended tax rate is calculated under Federal / Federal Review.

To access it, all questions must be answered in the Federal Review.

At the end of the questions. Look at the bottom of the screen

It will say Get a detailed view of your numbers.

The Blended Tax rate is:

Tax liability (Including SE tax, capital gain and special taxes),
Divided by
Taxable income (Total income minus deductions, but before credits).
(All line numbers are on form 1040).

The Effective Tax rate is your:

Total income (line 9)
Deductions (Line 12) This is Itemized or Standard
Taxable Income (Line 9 – Line 12)
Blended Tax Rate (Tax Liability [below] / Taxable Income [above])
Tax Liability (Line 16 + Line 23)
Taxes Paid (line 25d)
Credits (Line 21)
Total Tax Paid (Line 21 + Line 25d)
Refund/Due (Line 34 or Line 37)

Effective tax rate doesn't consider SE tax and any penalties, and blended tax rate does. Blended tax rate is a confusing and unnecessary term to be using in TT, and gets everybody all upset.

You can compute it yourself with a calculator.

Effective tax rate is something Turbo Tax uses to help you see where you stand; to see which W-2 may be deficient in withholding the correct amount of Federal tax, etc.

It should be the tax divided by the total income, not the AGI. It is a number without any real value other than just to let you know when you earn $1, about x% is taxed.

For more effective information see:

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